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Germany’s Answer to Tesla’s Gigafactory Is on Its Way

A German consortium is preparing to set up major lithium-ion battery cell production facilities at two locations.

Led by a company called TerraE Holding GmbH, the group aims to target customers in the transport and industrial sectors who want to achieve “strategic delivery security” and to participate in the project.

The consortium comprises companies ranging from machine engineering firms to cell manufacturers and material producers. Its factories will be so-called foundries – customers will come with their own specifications, and the factories will build them. Federal research minister Johanna Wanka recently heaped praise on the initiative, saying it demonstrated how “research creates jobs in Germany.”

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According to Bloomberg, TerraE will choose a site in or around Germany next month, where it will build a 34 gigawatt-hour factory. This is roughly comparable to Tesla’s under-construction Gigafactory, which the car-maker is building in Nevada. The project is the second of its kind in Europe, with two Tesla veterans driving the construction of a similar one in Sweden.

Read: These Two Tesla Vets Want to Build the Next ‘Gigafactory’ in Sweden

The news comes as pressure ramps up on Germany’s traditional auto giants to speed up their transition to electric mobility, against a background of rising concern about air quality problems caused by diesel engines – and the ethically questionable means the carmakers have used to mask the problem over the last decade.

Daimler recently broke ground on its own lithium-ion battery plant, and Volkswagen aims to be selling 1 million electric cars a year by 2025 (a goal that has reportedly met with pushback from senior managers). BMW said earlier this week it is on track to sell 100,000 electric and hybrid cars next year, and also recently announced plans to start production of an all-electric Mini in 2019.

Read: BMW Will Make the Electric Mini in the U.K. Despite Brexit Risk

Meanwhile, major battery production facilities are also being set up in China, the current leader in the market. Lithium-ion batteries are needed not just for electric vehicles, but also to store the energy that’s harvested from renewable sources.